Chile’s National Economic Prosecutor’s Office (FNE) has approved the transaction through which Abra Group—the parent company of Avianca, Gol, and Wamos Air—will acquire SKY Airline. Following a nearly five-month investigation, the Chilean regulatory authority determined that the transaction will not substantially lessen competition in the passenger air transport, air cargo, and aircraft leasing markets.
FNE Ruling and Mitigation Commitments
The formal merger notification was filed with the FNE last December by both companies. After analyzing the background information and assessing the potential impact on the regional commercial aviation market, the prosecutor’s office concluded that the move does not pose a threat to free competition.
Nevertheless, the involved parties entered into specific mitigation commitments with the regulatory body to ensure market transparency:
- Non-Compete Clause: A 24-month period was established during which the firms are barred from participating in competing businesses.
- Key Personnel Restriction: During the same 24-month period, the transfer of key executives from SKY Airline to the Abra Group holding company will be restricted.
- Verification Mechanism: The companies must submit a copy of the final agreement to the FNE to allow monitoring and enforcement of these measures.
→ SKY Airline Celebrates 25 Years, Consolidating Its Low-Cost Model and Regional Connectivity
International Regulatory Status and Routes Under Analysis
Chile is not the only jurisdiction involved in the antitrust review of this corporate concentration. The progress of international regulatory approvals is detailed below:
- Brazil: The Administrative Council for Economic Defense (CADE) granted its official approval for the transaction last Tuesday.
- Peru: The National Institute for the Defense of Copyright and Intellectual Property (INDECOPI) is still evaluating the transaction. The ruling from this agency is the last remaining green light needed to finalize global approval of the deal.
International Routes Evaluated
The FNE’s investigation meticulously analyzed the impact on international routes where the operations of the group’s airlines could overlap. The city pairs under technical scrutiny included:
- Santiago – Punta Cana
- Santiago – Cancún
- Santiago – Miami
- Regional market routes to Brazil and Colombia
Financing Origins and SKY Airline’s Current Landscape
The agreement dates back to the COVID-19 pandemic health crisis, a period marked by lockdowns and a drastic reduction in international travel that forced competitors like LATAM Airlines to restructure operations under Chapter 11. Against this backdrop, Abra Group provided financing to SKY Airline via a convertible bond valued at an estimated $100 million.
This financial instrument offered two courses of action for the holding company: taking a minority stake or assuming majority control of the Chilean carrier. On December 15, Abra Group formalized its decision to pursue the second option.
Operational and Commercial Challenges
The announcement coincides with the celebration of SKY Airline’s 25-year history. Management has focused on delivering the carrier to the purchasing holding company in the healthiest financial state possible.
However, the commercial landscape presents challenges in the Chilean international market. Recent data provided by the Civil Aviation Board (JAC) for the January–April period reveals that JetSmart surpassed SKY Airline in international passenger volume, displacing it from its historical second-place spot in this segment.
Next Steps
With approvals from Chile and Brazil now ratified, the definitive closing of the global transaction remains subject to INDECOPI’s ruling in Peru. Once this regulatory hurdle is cleared, the final equity stake to be retained by the Paulmann Mast family in the new ownership structure, as well as their role and representation on the airline’s board of directors, remains to be defined.
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Plataforma Informativa de Aviación Comercial con 13 años de trayectoria.